Activision Blizzard lawsuit and investigations explained

Since the news of the Activision Blizzard lawsuit broke on July 21, the gaming world has been rocked by the allegations made in the California Department of Fair Employment and Housing’s (DFEH) investigation into the publisher. 

Content warning: the following article will discuss matters relating to sexual harassment and suicide.

The lawsuit detailed claims of a "frat boy" culture at Activision Blizzard, as well as noting in the lawsuit that “female employees are subjected to constant sexual harassment" and that "effective remedial measures" had not been taken by the company in response to these complaints. 

Activision Blizzard’s initial response to the lawsuit had called it "inaccurate" and "distorted", which led to a response from over 3,000 developers at Activision Blizzard, who signed an open letter criticizing the statement and staging a strike on July 28. 

As the situation develops, we’ll be updating this story to explain what the Activision Blizzard lawsuit is and how the publisher is responding to it.

What the lawsuit alleges 

The California DEFH’s lawsuit, which you can read in full here, goes into specific detail about an alleged "frat boy" culture and found evidence that "Defendants discriminated against female employees in terms and conditions of employment, including compensation, assignment, promotion, termination, constructive discharge, and retaliation". The DFEH also claims to have found evidence of women being sexually harassed and that the "Defendant failed to take all reasonable steps to prevent lawful discrimination, harassment, or retaliation". It also alleges to have found evidence that Activision Blizzard paid female employees less than male employees for similar work.  

The details of the lawsuit are stark. It starts by disclosing that only roughly 20% of the workforce are women, with top leadership exclusively white and male, and that women who reach a broadly similar level are paid less than them. The lawsuit then says that "women are promoted more slowly and terminate them more quickly compared to their male counterparts", which it claims forces women to leave the company.

It then details the "frat boy" culture, including the practice of "cube crawls", where male employees would drink "copious amounts of alcohol as they 'crawl' their way through various cubicles in the office and often engage in inappropriate behavior towards female employees". It then claims that male employees would turn up to work "proudly" hungover, delegate tasks to female employees while playing games for a long period of time, and it also alleges that male employees joke about rape.  

The lawsuit goes on to describe how this has created a "breeding ground" for sexual harassment, with "high-ranking executives and creators engaged in blatant sexual harassment without repercussions". It is then highlighted that a female employee took her own life while on a business trip. 

The suit then describes that the company's HR department was ineffective, as HR personnel "were known to be close to alleged harassers". Employee complaints were allegedly not kept confidential, which lead to retaliation such as female employees being "deprived of work on projects, unwillingly transferred to different units, and selected for layoffs". 

It’s also revealed in the lawsuit that the DFEH tried to “resolve the matter without litigation”, but attempts to resolve this with Activision Blizzard in early July were unsuccessful. 

They’re now asking for a trial by jury, as well as relief of compensatory and punitive damages; unpaid wages, liquidated damages, and other remedies and penalties available under the USA’s federal Equal Pay Act; injunctive relief; declarative relief; equitable relief; prejudgement interest; attorney’s cost for the claimant; and other relief the court deems just and proper.    

Activision’s response

In response to the lawsuit, Kelvin Liu, director of corporate communications, told CNN that the company was taking the allegations seriously and had launched internal investigations for the claims made. Liu said that "we value diversity and strive to foster a workplace that offers inclusivity for everyone. There is no place in our company or industry, or any industry, for sexual misconduct or harassment of any kind.

Liu went on, however, to suggest that the state of California's investigation and the subsequent lawsuit was "inaccurate" and "distorted," saying that "the picture the DFEH paints is not the Blizzard workplace of today. Over the past several years and continuing since the initial investigation started, we've made significant changes to address company culture and reflect more diversity within our leadership teams."

A similar statement was also issued to Bloomberg Law. 

Open letter from Activision Blizzard staff

Some of the comments made by Activision Blizzard leadership after the lawsuit was filed were labeled "abhorrent and insulting" in an open letter that has now been signed by more than 3,000 members of staff.

The letter (via Bloomberg) stated that signatories "believe these statements have damaged our ongoing quest for equality inside and outside of our industry. Categorizing the claims that have been made as 'distorted, and in many cases false' creates a company atmosphere that disbelieves victims". The letter went on to call for "immediate corrections [...] from the highest level of our organization," as well as "official statements that recognize the seriousness of these allegations and demonstrate compassion for victims of harassment and assault."

Bobby Kotick's statement 

Following Activision Blizzard's public response to the lawsuit and the subsequent petition, on July 27, the company's CEO, Bobby Kotick, issued a public statement addressed to all of his employees.

In that statement, Kotick said that it had been "a difficult and upsetting week," and that he wanted "to recognize and thank all those who have come forward in the past and in recent days."

Kotick also stated that Activision Blizzard is "taking swift action to be the compassionate, caring company you came to work for and to ensure a safe environment. There is no place anywhere at our company for discrimination, harassment, or unequal treatment of any kind. We will do everything possible to make sure that together, we improve and build the kind of inclusive workplace that is essential to foster creativity and inspiration."

To that end, Kotick announced that he had asked a law firm "to conduct a review of our policies and procedures to ensure that we have and maintain best practices to promote a respectful and inclusive workplace." The law firm, Washington D.C.'s WilmerHale, was to being work immediately, and employees were encouraged to reach out "on a confidential basis" if they had had "an experience you believe violates our policies or in any way made you uncomfortable in the workplace."

The CEO also pledged to take five immediate actions as part of a commitment to long-lasting change. They include:

1 - Providing employee support by investigating "each and every claim and providing more senior staff and resources to the Compliance and Employee Relations teams; 

2 - Listening sessions to provide safe spaces for employees to speak out and share areas for improvement; 

3 - Personnel changes in which "anyone found to have impeded the integrity of our process for evaluating claims and imposing appropriate consequences will be terminated.

4 - Changes to hiring practices to ensure "all hiring managers [...] have diverse candidate slates for all open positions

5 - Changes to remove content that employee and player communities have flagged as "inappropriate" from Activision Blizzard's games.

Activision Blizzard staff walkout

Activision Blizzard employees then began planning strike action, ahead of a walkout that took place at 10AM PT on August 28, outside Blizzard's headquarters in Irvine, California.

Ahead of the walkout, organizers released a statement (via Axios reporter Megan Farokhmanesh) saying that "while we are pleased to see that our collective voices [...] have convinced leadership to change the tone of their communications," Kotick's message "fails to address critical elements at the heart of employee concerns. The statement outlines four major issues; the end of forced arbitration for all employees; worker participation in the oversight of hiring and promotion policies; the need for greater pay transparency; and employee selection of a third-party audit of HR and other company processes.

Organizers went on to say that yesterday's walkout "is not a one-time event," and "is the beginning of an enduring movement in favor of better labor conditions for all employees, especially women, in particular women of color and transgender women, nonbinary people, and other marginalized groups."

Blizzard president steps down

In a statement on August 3, Blizzard announced that company president J. Allen Brack would be stepping down as leader of the studio, to be replaced by Jen Oneal and Mike Ybarra.

In a message to players, Brack said that he was "confident that Jen Oneal and Mike Ybarra will provide the leadership Blizzard needs to realize its full potential and accelerate the pace of change. I anticipate they will do so with passion and enthusiasm and that they can be trusted to lead with the highest levels of integrity and commitment to the components of our culture that make Blizzard so special."

Oneal, who was previously head of Vicarious Visions, the Tony Hawk Pro Skater 1 + 2 developer that was incorporated into Blizzard earlier this year, joined as executive vice president of development. Ybarra worked at Microsoft for two decades and was the company's corporate vice president of gaming when he left for Blizzard in 2019 to act as an executive vice president and general manager.

Blizzard's statement says: "Both leaders are deeply committed to all of our employees; to the work ahead to ensure Blizzard is the safest, most welcoming workplace possible for women, and people of any gender, ethnicity, sexual orientation, or background; to upholding and reinforcing our values; and to rebuilding your trust. With their many years of industry experience and deep commitment to integrity and inclusivity, Jen and Mike will lead Blizzard with care, compassion, and a dedication to excellence."

Oneal and Ybarra will "share responsibilities over game development and company operations" moving forward, and Blizzard says that players will "hear more from Jen and Mike soon."

Activision Blizzard staff criticize CEO Bobby Kotick's response to demands

In a letter shared with IGN on August 2, the ABK Workers Alliance - a group of Activision Blizzard employees - has addressed CEO Bobby Kotick and senior management, and rejected the company's response to employee demands.

"In response to our demands, you wrote a letter to employees expressing a commitment to doing a better job of listening. You said you would do everything possible to work with employees in improving our workplace. And yet, the solutions you proposed in that letter did not meaningfully address our requests. You ignored our call for an end to mandatory arbitration. You did not commit to adopting inclusive recruitment and hiring practices. You made no comment on pay transparency.

One of our demands, a third-party audit of ABK practices and policies, was ostensibly addressed by your decision to hire WilmerHale to conduct an internal review. While we commend the idea of hiring a third-party firm to perform an internal review, The ABK Workers Alliance cannot support the choice of WilmerHale as an impartial reviewer."

You can read the letter in full here. 

The letter goes on to address the ABK Workers Alliance's specific issues with WilmerHale's involvement in the process, and the WilmerHale partner leading the investigation, Stephanie Avakian.

Activision Blizzard Financial Results statement

In the press release that accompanied the company's second-quarter 2021 financial results, Kotick addressed the topic of staff welfare in a statement.

“We remain intensely focused on the well-being of our employees and we are committed to doing everything possible to ensure that our company has a welcoming, supportive and safe environment where all of our team members can thrive.”

The company also included a section, amidst its financial results, on the topic of its commitment to a safe working environment. 

"We have engaged a law firm to conduct a review of our policies and procedures to ensure that we have and maintain best practices to promote a respectful and inclusive workplace. We will be adding additional staff to our Compliance and Employee Relations teams, strengthening our capabilities in investigating employee concerns," it reported.

It also committed to creating safe spaces for employees to share concerns with third parties, and to allocate resources to more diverse hiring practices. Current senior staff members are also being assessed.

"We will be evaluating managers and leaders across the company with respect to their compliance with our processes for evaluating claims and imposing appropriate consequences."

Activision Blizzard HR executive left company in January

Jesse Meschuk, SVP and senior people officer at Activision Blizzard, has left the company. The departure was confirmed by the company to Bloomberg, with Axios reporting Meschuk left his position as head of HR in January. No further information was given on the departure. Meschuk has also deleted his Twitter account. 

More high profile departures at Blizzard

On August 11, Kotaku reported that Luis Barriga, game director on Diablo 4, Blizzard lead level designer Jesse McCree and World of Warcraft designer Jonathan LeCraft have left the company. Blizzard has made no official statement on the departures, but has allegedly informed Blizzard development teams. 

California DFEH expands lawsuit

On August 24, the California Department of Fair Housing & Employment expanded its lawsuit to include temporary workers.

The DFEH also claims that Activision Blizzard has attempted to "directly interfere" with the investigation through the use of non-disclosure agreements (NDAs). It also alleges that "documents related to investigations and complaints were shredded" by the company's HR department. In a statement provided to Axios, the developer said that it has "complied with every proper request in support of [the DFEH's] review." The company denies destroying information by shredding documents.

New lawsuit brought against Activision Blizzard by Communication Workers of America

On September 10, a new lawsuit was brought against Activision Blizzard by the Communication Workers of America to the National Labor Review Board which related to "for worker intimidation and union busting". In a press release announcing the lawsuit, it has been alleged by the CWA that "Activision Blizzard management is using coercive tactics to attempt to prevent its employees from exercising their rights to stand together and demand a more equitable, sustainable, and diverse workplace." Activision Blizzard are yet to respond to the new lawsuit.

SEC, EEOC investigation and Activision response

On September 20, the Wall Street Journal [Paywall] published a report that claimed Activision are also being investigated by the Securities and Exchange Commission, including how the company dealt with "employees’ allegations of sexual misconduct and workplace discrimination." 

The report also alleged that CEO Bobby Kotick, alongside several other executives, had been subpoenaed by the SEC to provide "minutes from Activision board meetings since 2019, personnel files of six former employees and separation agreements the company has reached this year with staffers."

The report also claims that the Equal Employment Opportunity Commission has also been investigating the company since "at least" May 2020 around allegations of gender-based harassment, and that Activision is looking to settle with the agency. 

In a press release on September 21, Activision Blizzard confirmed the investigations were taking place and that it was complying with them. The statement reads: "The Company is actively engaged in continued discussions with the EEOC and has cooperated with the EEOC’s investigation concerning certain employment practices.

"It also confirmed that it is complying with a recent U.S. Securities and Exchange Commission (SEC) subpoena issued to the Company and several current and former employees and executives regarding disclosures on employment matters and related issues. The Company is confident in its prior disclosures and is cooperating with the SEC’s investigation"

Activision Blizzard address lawsuit during earnings call

Activision Blizzard addressed the lawsuit during its November 1 earnings call. It included a review of some of the actions taken by the accompany to address its issues. 

"In September, we announced a comprehensive agreement with the US Equal Opportunity Commission which is subject to court approval to strengthen policies and programs intended to further improve the prevention of harassment, discrimination and related content. As part of this agreement we’ll establish an $18 million fund to compensate those who have experienced such behavior at our Company," said CEO Bobby Kotick. 

" Last week, we’ve also announced a number of important new workplace initiatives. We announced a zero-tolerance harassment policy Company-wide. This includes tougher rules and greater consistency across the organization to make certain reports are always properly and promptly handled.

"Now any Activision Blizzard employee found through our new investigative processes and resources to have retaliated against anyone for making a complaint complain will be terminated immediately. In many other instances of workplace misconduct, we will no longer rely on written warnings, terminations will be the outcome, including in most cases of harassment based on any legally protected category. Future employment contract and equity awards will state that termination for these reasons, will result in immediate forfeiture of future compensation."

Activision loses Blizzard co-leader Jen Oneal

In its earning call On November 1, Activision Blizzard announced one of the new co-leaders of Blizzard, Jen Oneal, would be leaving the company. She has been in the role - one shared with Mike Ybarra - since only August. 

"I am doing this not because I am without hope for Blizzard, quite the opposite – I’m inspired by the passion of everyone here, working towards meaningful, lasting change with their whole hearts," Oneal said in a letter confirming that she has stepped down from her lead role as of today. "This energy has inspired me to step out and explore how I can do more to have games and diversity intersect, and hopefully make a broader industry impact that will benefit Blizzard (and other studios) as well. While I am not totally sure what form that will take, I am excited to embark on a new journey to find out."

Wall Street Journal article and petition to remove Bobby Kotick as CEO

On Tuesday 16 November, a report by the Wall Street Journal revealed more details about alleged sexual misconduct at Activision, as well as claiming that CEO Bobby Kotick had stepped in to keep one studio co-head in his role despite a recommendation that he be fired. The resulting backlash against the CEO saw the company's worker's union, A Better ABK, organize a walkout on November 16, as well as start a petition to remove Bobby Kotick as CEO of Activision Blizzard. As of the time of writing, 1337 Activision Blizzard employees have signed the petition.